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Houston Area Employment — October 2018

Total nonfarm employment in the Houston-The Woodlands-Sugar Land Metropolitan Statistical Area stood at 3,158,800 in October 2018, up 117,800 or 3.9 percent, from one year earlier, the U.S. Bureau of Labor Statistics reported today. During the same period, the national job count increased 1.7 percent. Assistant Commissioner for Regional Operations Stanley W. Suchman noted that among the 12 largest metropolitan areas in the country, Houston ranked first in both the number of jobs added over the year and the annual rate of job growth. (See chart 1 and table 1; the Technical Note at the end of this release contains metropolitan area definitions. All data in this release are not seasonally adjusted; accordingly, over-the-year analysis is used throughout.)

Industry employment

In the Houston metropolitan area, professional and business services added the largest number of jobs from October 2017 to October 2018, up 30,600. Job gains were widespread within the sector, but most notable in the employment services industry which added 11,200 jobs, a 12.7-percent increase over the year. Houston’s professional and business services employment rose 6.3 percent since October 2017, compared to the national increase of 2.6 percent. (See table 1 and chart 2.)

Construction added 25,600 jobs locally from October a year ago, the second-largest job gain among the supersectors. Job gains occurred in each of the three reporting industries, with the largest gain in construction of buildings, up 15,900 or 26.9 percent. Area employment in the construction supersector climbed 11.6 percent compared to the 4.4-percent gain for the nation.

Manufacturing in Houston added 16,100 jobs from October 2017 to October 2018. Local gains occurred in both the durable and non-durable goods manufacturing industries, but durable goods manufacturing produced the bulk of the increase (+13,700). The 7.4-percent increase in manufacturing employment in Houston compared to 2.3 percent nationally. This marked the 12th consecutive month of annual job growth in the local area and the fastest annual rate of gain since July 2012.

Trade, transportation, and utilities, Houston’s largest employer, added 16,000 jobs from October 2017 to October 2018. All three sub-sectors added jobs: retail trade (+5,600); transportation, warehousing, and utilities (+5,600); and wholesale trade (+4,800). Over the year, local employment in the trade, transportation, and utilities sector increased 2.6 percent, more than double the 1.1-percent nationwide increase.

Two other local sectors added at least 6,100 jobs over the year. Houston’s education and health services employment rose 8,800 from October a year ago. This gain represented a 2.3-percent increase locally, compared to the national advance of 2.1 percent. The other services sector in Houston added 6,100 jobs from October 2017; local employment rose 5.6 percent compared to 1.3 percent nationally.

Three additional local sectors had annual job gains of at least 3,700: financial activities (+4,800), mining and logging (+4,500), and leisure and hospitality (+3,700). Government had the smallest employment gain in the Houston area, up 1,800 jobs, or 0.4 percent from October a year ago.

Employment in the 12 largest metropolitan areas

Houston-The Woodlands-Sugar Land was 1 of the nation’s 12 largest metropolitan statistical areas in October 2018. All 12 areas had over-the-year job growth during the period, with the rates of job growth in 7 areas exceeding the national increase of 1.7 percent. Houston (+3.9 percent), Phoenix-Mesa-Scottsdale (+3.7 percent), and Dallas-Fort Worth-Arlington (+3.0 percent) had the fastest rates of job growth. Chicago-Naperville-Elgin (+0.9 percent), New York-Newark-Jersey City (+1.1 percent), and Los Angeles-Long Beach-Anaheim (+1.2 percent) had the slowest rates of job growth. (See chart 3 and table 2.)

Houston added the largest number of jobs over the year, 117,800, followed by Dallas (+109,000) and New York (+108,500). Chicago had the smallest employment gain over the year, 41,300, followed by San Francisco-Oakland-Hayward (+41,700) and Philadelphia-Camden-Wilmington (+43,600). Annual job gains in the remaining six metropolitan areas ranged from 76,700 in Phoenix to 53,100 in Boston-Cambridge-Nashua.

Over the year, professional and business services added the most jobs in six areas: Atlanta-Sandy Springs-Roswell, Boston, Dallas, Houston, San Francisco, and Washington-Arlington-Alexandria. Construction gained the most jobs in three areas: Chicago, Miami-Fort Lauderdale-West Palm Beach, and Phoenix.

The other services sector recorded the largest employment loss in three areas: Atlanta, Chicago, and San Francisco. Information lost the most jobs in three other areas: Houston, New York, and Philadelphia. Dallas and Washington were the only metropolitan areas to record gains in all supersectors.

Metropolitan area employment data for November 2018 are scheduled to be released on Friday, December 21, 2018, at 10:00 a.m. (ET).

Technical Note

This release presents nonfarm payroll employment estimates from the Current Employment Statistics (CES) program. The CES survey is a Federal-State cooperative endeavor between State employment security agencies and the Bureau of Labor Statistics.

Definitions. Employment data refer to persons on establishment payrolls who receive pay for any part of the pay period that includes the 12th of the month. Persons are counted at their place of work rather than at their place of residence; those appearing on more than one payroll are counted on each payroll. Industries are classified on the basis of their principal activity in accordance with the 2012 version of the North American Industry Classification System.

Method of estimation. CES State and Area employment data are produced using several estimation procedures. Where possible these data are produced using a "weighted link relative" estimation technique in which a ratio of current-month weighted employment to that of the previous-month weighted employment is computed from a sample of establishments reporting for both months. The estimates of employment for the current month are then obtained by multiplying these ratios by the previous month's employment estimates. The weighted link relative technique is utilized for data series where the sample size meets certain statistical criteria.

For some employment series, the sample of establishments is very small or highly variable. In these cases, a model-based approach is used in estimation. These models use the direct sample estimates (described above), combined with forecasts of historical (benchmarked) data to decrease volatility in estimation. Two different models (Fay-Herriot Model and Small Domain Model) are used depending on the industry level being estimated. For more detailed information about each model, refer to the BLS Handbook of Methods.

Annual revisions. Employment estimates are adjusted annually to a complete count of jobs, called benchmarks, derived principally from tax reports that are submitted by employers who are covered under state unemployment insurance (UI) laws. The benchmark information is used to adjust the monthly estimates between the new benchmark and the preceding one and also to establish the level of employment for the new benchmark month. Thus, the benchmarking process establishes the level of employment, and the sample is used to measure the month-to-month changes in the level for the subsequent months.

Reliability of the estimates. The estimates presented in this release are based on sample surveys, administrative data, and modeling and, thus, are subject to sampling and other types of errors. Sampling error is a measure of sampling variability–that is, variation that occurs by chance because a sample rather than the entire population is surveyed. Survey data also are subject to nonsampling errors, such as those which can be introduced into the data collection and processing operations. Estimates not directly derived from sample surveys are subject to additional errors resulting from the specific estimation processes used. The sums of individual items may not always equal the totals shown in the same tables because of rounding.

Employment estimates. Measures of sampling error for the total private employment series are available for metropolitan areas and metropolitan divisions at www.bls.gov/sae/790stderr.htm. Measures of sampling error for more detailed series at the area and division level are available upon request. Measures of sampling error for states down to the supersector level are available on the BLS website at www.bls.gov/sae/790stderr.htm. Measures of nonsampling error are not available for the areas contained in this release. Information on recent benchmark revisions is available online at www.bls.gov/sae/benchmark2017.pdf

Area definitions. The substate area data published in this release reflect the delineations issued by the U.S. Office of Management and Budget, dated July 15, 2015. A detailed list of the geographic definitions is available at www.bls.gov/lau/lausmsa.htm.

More complete information on the technical procedures used to develop these estimates and additional data appear in Employment and Earnings, which is available online at www.bls.gov/opub/ee/home.htm. Industry employment data for states and metropolitan areas from the Current Employment Statistics program are also available in the above mentioned news releases and from the Internet at www.bls.gov/sae/.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: (202) 691-5200; Federal Relay Service: (800) 877-8339.

Table 1. Employees on nonfarm payrolls by industry supersector, United States and Houston metropolitan area, not seasonally adjusted (numbers in thousands)